What You Need to Know About Forced Arbitration

If your bank, cell phone provider, employer or other company that you conduct business with violated your rights or cheated you, would you want to retain your ability to take them to court? Many companies are now using fine print to stop you and other consumers from doing so through forced arbitration.
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What is Arbitration?

Arbitration is the settling of differences between two parties by an unbiased third party member (also known as an arbitrator). Unlike litigation, arbitration takes place outside of the courtroom. Once an arbitrator decides the outcome of the case, the decision is binding and the results are not made public.

Voluntary Arbitration

There are two types of arbitration: voluntary and forced. Voluntary arbitration takes place when both disputing parties voluntarily agree to submit their disagreement to an arbitrator after it happens. They also have a chance to investigate the best options to resolving their individual claims.

Forced Arbitration

Forced arbitration, on the other hand, happens when a company requires a consumer or employee to submit any dispute to an arbitrator – therefore binding arbitration as a condition of employment or buying a product or service. Employees and consumers are required to waive their right to sue, appeal, or participate in a class action or lawsuit against these companies.

So What?

There’s nothing wrong with arbitration if it’s voluntary. However, forced arbitration is being written into more and more terms of agreement and contract, including those used for employment, insurance, home-building, and more. These clauses are usually not very easy to find in paperwork and contracts, inhibiting people the right to sue if they need to for any incident. The right to sue is something an individual should never have to give up, and forced arbitration gets companies out of being held accountable for their actions.

Many employees and consumers oppose forced arbitration for many reasons, but here are a few important ones:

  • Employees and consumers are often unaware they’ve agreed to forced arbitration.
  • Employees can’t sue for discrimination, harassment, abuse, retaliation or wrongful termination.
  • Consumers can’t sue for negligence, defective products or scams if they’ve signed a contract that has a clause for force arbitration.

Need Help? We’ve Got You Covered.

To avoid forced arbitration, try to find an alternative and try to negotiate the terms of your contract. If you need legal help against a company using an arbitration clause, contact one of our experienced attorneys at O’Keeffe O’Brien Lyson Foss. We are here and ready to help you.

Image courtesy of qwrrty/Flickr

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